Like most Silicon Valley chip-design specialists, Altera has long adhered to a trusted formula: Design semiconductors at home; produce them in Asia. For the San Jose (Calif.)-based company, which sells phone-equipment processors, that's meant outsourcing production to Taiwan Semiconductor Manufacturing Co., whose cutting-edge chipmaking plants save customers the $4 billion or more it'd cost to build their own. TSMC is the leader in the $39.3 billion contract manufacturing industry for chips-the so-called foundry business-taking roughly $7 per smartphone sold.
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